26 Jan 2010 07:00
Interim Management Statement
The 600 Group PLC ("600 Group" or "the Group"), the manufacturer and distributor of precision engineering products to international markets, announces its Interim Management Statement for the period from 27 September 2009 to 25 January 2010 ("the Period").
Whilst conditions in certain of the Group's markets remained difficult during the Period, positive signs of recovery continued within our machine tools and laser markets, particularly in North America, and this was reflected in our trading performance. Order intake levels for the 14 weeks ended 2 January 2010 increased by 20% and underlying revenue was 25% higher when compared to the previous quarter. Our forward order book for these markets remains stable and we expect order intake to remain at these levels for the remainder of the current financial year. Overall gross margin improved to 33% and the overhead cost savings anticipated under the board's turnaround strategy have been achieved. These factors have enabled the Group to generate a positive EBITDA for the Period.
Net borrowings at the end of the Period remained at a similar level to the half-year end. Overall borrowing facilities currently total £6.5m and the board believes that this is sufficient for the Group's ongoing operational needs. Net working capital levels continued to reduce during the Period and the board is actively seeking further opportunities to continue this improvement.
As previously reported, the board is now focused on further strengthening the Group's supply chain and developing its manufacturing footprint in order to increase capacity and reduce lead times. The product range has been improved during the current financial year and has been focused on higher margin lines such that the improvement in gross margin can be sustained. The remaining actions in our cost reduction programme, relating to the consolidation of our European sales, finance and manufacturing activities, will be completed by 27 March 2010.
The Group's performance during the Period was in line with the board's expectations and, following the implementation of the cost reduction strategy and increase in EBITDA, the Group is well positioned to benefit from any further improvement in trading conditions.
| Enquiries: | |
| The 600 Group PLC | Tel: 01924 415 000 |
| David Norman, Group Chief Executive | |
| Martyn Wakeman, Group Finance Director | |
| The 600 Group website | www.600Group.com |
| Evolution Securities Limited | Tel: 0113 243 1619 |
| Joanne Lake | |
| Rawlings Financial PR Limited | Tel: 01653 618 016 |
| Catriona Valentine |
Notes to Editors:
The 600 Group PLC is the UK's largest machine tool company operating from a number of locations worldwide and sells its products into more than 180 countries. The Group has two core areas of business activity centred on machine tools and laser marking excellence:
| | Machine Tool Division: 600 Group is one of the world's leading names in the manufacture and global distribution of state-of-the-art machine tools. Principal products within the internationally renowned Colchester-Harrison range include Tornado CNC turning centres, Alpha CNC combination lathes, Storm vertical machining centres and conventional centre lathes. Important parts of this division are: | |
| - | The 600 Europe operations in West Yorkshire and Stuttgart, Germany, distribute 600 Group products throughout the UK, Continental Western and Central Europe. Additionally, it distributes workholding accessories under the Parat brand. | |
| - | 600 North America, based in Michigan, supplies Group products throughout the USA and Canada, including the Clausing range of machine tools. | |
| - | The Group's international distribution centres also stock and ship a wide range of workholding accessories manufactured for other machine builders, most of which are manufactured in the Group's UK facilities. These accessories include manual and power chucking products from Pratt Burnerd, workholding products from Crawford Collets and precision machine tool bearings from Gamet Bearings. | |
| - | To support these comprehensive product ranges, a complete technical support service is available for all customers, including on-site service engineering and extensive spare parts stockholding for the installed base of existing machines. | |
| | Laser Marking Division: Electrox provides laser marking solutions for a huge range of materials and applications, through its operations in the UK and USA. Electrox is one of the few truly integrated manufacturers of laser marking systems in the world, taking end-to-end responsibility for every aspect of design, development and production of both hardware and software technologies. | |